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2006 (3) TMI 226 - AT - Income TaxDisallowance u/s 14A - expenditure incurred by the assessee in relation to income - HELD THAT:- In our opinion, the said expenditure incurred on running the branches of the assessee-bank cannot be considered as incurred in relation to the tax-free income earned by it and it is only the expenditure directly attributable for making the corresponding investments that alone can be considered as in relation to the said income for the purpose of making a disallowance on pro rata basis for the purpose of s. 14A Before the authorities below as well as before us, the assessee has quantified such expenditure at Rs. 5.76 lakhs, which quantum, however, appears to have not been verified by the AO. We, therefore, direct the AO to verify the same and accordingly recompute the disallowance to be made u/s 14A of the Act. In the result, the appeal of the assessee is treated as partly allowed.
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